The EU on Monday slapped a 550-million-euro ($630 million) fine on online retailer AliExpress for allowing the sale of illegal products, including unsafe toys and cosmetics.

The European Union said AliExpress also did not do enough to stop the sale of counterfeit products and that when the platform detected illegal goods were on sale, many remained online for several weeks.

The EU found some of the products sold on the platform did not meet the bloc’s strict environmental and safety standards during its investigation into AliExpress launched in March 2024.

“Risks must be identified and addressed systematically to ensure consumers can safely shop online. Today, we are holding AliExpress to this standard and request it to take action,” EU tech chief Henna Virkkunen said in a statement.

EU said AliExpress failed to adequately stop counterfeit sales and many detected illegal products remained online for several weeks after being identified there
It is the largest fine ever imposed under the EU’s powerful Digital Services Act (DSA), part of the bloc’s legal armoury to police big tech that entered into force in 2022.

Elon Musk’s X social media platform received a 120-million-euro fine in December last year, while the EU slapped e-commerce giant Temu with a 200-million-euro fine in May.

AliExpress criticised the “disproportionate” fine, saying in an updated statement that the EU’s decision “ignores our sound risk management framework and the significant, proactive enhancements we have made”.

The company added it would appeal the fine.

The EU said the amount took into consideration the nature of the violations, the impact on Europeans and the duration of the infringements.

AliExpress is the biggest Chinese e-commerce platform in the EU with 193 million users, while Asian fashion giant Shein and retailer Temu respectively have 156 million and 130 million users.

The EU is AliExpress’ biggest market, a senior European official said.

Under the DSA, the world’s most popular digital platforms including social media networks and online retailers must evaluate what risks they pose and take measures to tackle the dangers.

The EU said AliExpress’ “overestimated the effectiveness of its system in detecting and removing illegal products”.

Millions of products would also reappear, the EU official said. And many illegal products would be recommended to users before they were removed.

Those selling illegal goods were still able to remain active on AliExpress.

The platform also did not “adequately” stop the sale of counterfeit products because its mandatory “brand authorisation” system “proved ineffective and understaffed. Therefore, traders easily bypassed this”, the EU found.

The DSA is part of a strengthened legal weaponry to rein in what the EU views as Big Tech’s excesses, and fines can go as high as six percent of a company’s total worldwide annual turnover.

The EU official said the global turnover of Alibaba, AliExpress’ parent company, was 122 billion euros last year, but the fine was well below six percent of that.

AliExpress has to now pay the fine and present a plan to the EU by October 20 that includes what action it will take to tackle the breaches.

If it does not comply, AliExpress risks periodic penalty payments.

Virkkunen told reporters AliExpress was “cooperating very actively” with the European Commission, the EU’s digital watchdog.

The EU has stepped up its efforts in recent years to combat what it says is unfair competition from Chinese retailers, including slapping a levy of three euros this month on cheap parcels entering the 27-nation bloc.

But Virkkunen insisted the EU did not target platforms based on their origin.

“We are investigating several online platforms. So a big part of them are from the USA, many of them are from China and also from Europe,” she said.

The Chittagong Stock Exchange (CSE) has restructured its benchmark CSE-30 Index, adding four companies and dropping four others following its semi-annual review, with the revised index set to take effect on 30 July 2026.

In a statement issued today (21 July), the bourse said the rebalancing was based on an assessment of listed companies' financial performance and market-related indicators.

The four companies newly included in the index are Grameenphone, Jamuna Bank, LafargeHolcim Bangladesh, and Paramount Textile PLC.

The companies dropped from the index are Crown Cement, National Credit and Commerce (NCC) Bank, Square Textiles, and Uttara Bank PLC.

Following the latest revision, the CSE-30 comprises Bangladesh Shipping Corporation, Bangladesh Steel Re-Rolling Mills (BSRM), Bangladesh Submarine Cables, Beximco Pharmaceuticals, BRAC Bank, British American Tobacco Bangladesh Company, BSRM Steels, City Bank, DBH Finance, Delta Life Insurance Company, Eastern Bank, Eastern Housing, Grameenphone, IDLC Finance, IT Consultants, Jamuna Bank, Jamuna Oil, LafargeHolcim Bangladesh, Meghna Petroleum, MJL Bangladesh, Olympic Industries, Padma Oil, Paramount Textile, Pioneer Insurance Company, Prime Bank, Sonali Paper & Board Mills, Square Pharmaceuticals, The ACME Laboratories, Unique Hotel & Resorts, and Walton Hi-Tech Industries PLC.

According to the CSE, the reconstituted CSE-30 Index represents about 44.69% of the total market capitalisation of all listed companies. On a free-float basis, its constituents account for around 43.13% of the market's total free-float capitalisation.

How companies are selected

Under the CSE's index methodology, the CSE-30 is a rules-based, free-float market capitalisation-weighted index reviewed every six months. Constituents are selected through a two-stage screening process.

In the first stage, companies must meet basic eligibility criteria, including a minimum market capitalisation of Tk600 million, at least 20% free-float shares, trading on at least 70% of trading days during the six-month review period, positive retained earnings, dividends declared in at least one of the previous two years, and no "Z" category classification.

Financial institutions on Bangladesh Bank's watchlist and companies penalised under securities laws in the past two years are also excluded.

In the second stage, eligible firms are ranked based on financial and market indicators, including net asset value (NAV) per share, earnings per share (EPS), dividend rate, price-to-earnings (P/E) ratio, dividend yield, free-float ratio, price-to-book (P/B) ratio, trading frequency, number of contracts, and the length of continuous inclusion in the CSE-30. The top 30 companies are then selected.

As a free-float market capitalisation-weighted index, the CSE-30 assigns weights based only on publicly tradable shares, excluding holdings of sponsors, directors, the government, strategic investors and shares under lock-in restrictions.

The CSE has followed this methodology since 2013, aligning the index with international benchmark standards used by major global index providers such as MSCI, FTSE and S&P.

Bangladesh has the potential to achieve in a much shorter period the level of economic development that the Republic of Korea attained over the past 70 years, Kim Ji-Joon, the newly appointed South Korean ambassador to Bangladesh, said yesterday.

He made the remarks at a reception hosted by the Korea-Bangladesh Chamber of Commerce and Industry (KBCCI) at Hotel Amari in Dhaka to welcome him, according to a press release.

Kim said Bangladesh could accelerate its path to sustainable economic growth by drawing lessons from South Korea’s development experience while avoiding the mistakes it made along the way.

Highlighting the long-standing friendship between the two countries, he stressed the importance of deepening economic ties to ensure their shared long-term prosperity. He called for greater bilateral cooperation in trade, investment, technology transfer and joint ventures.

Speaking at the event, KBCCI President Shahab Uddin Khan reaffirmed the chamber’s commitment to strengthening bilateral trade, investment and economic cooperation between Bangladesh and South Korea. Welcoming the new ambassador, he expressed confidence that Kim’s tenure would mark a new chapter in bilateral relations and help deepen the economic partnership between the two friendly nations.

Md Nazrul Islam, secretary (bilateral) at the Ministry of Foreign Affairs, said the economic and commercial relationship between Bangladesh and South Korea had continued to strengthen over the years.

He emphasised the need to further expand cooperation through industrialisation, technology transfer, investment promotion and human resource development, while commending the KBCCI for its role in enhancing economic ties between the two countries.

During the programme, Kim presented a certificate of merit, signed by South Korean Foreign Minister Cho Hyun, to Shahab Uddin Khan in recognition of his contribution to strengthening economic cooperation, promoting bilateral trade and supporting South Korea’s diplomatic activities in Bangladesh.

Ambassadors and high commissioners from various countries, senior government officials, members of the diplomatic corps, business leaders and KBCCI members also attended the event.

The global leather industry is changing rapidly. Environmental sustainability, resource efficiency, traceability and responsible production have become essential for competing in international markets. For Bangladesh, which has one of the world’s largest supplies of naturally available hides and skins, this shift presents both challenges and opportunities. At the centre of this changing landscape is the Leather Working Group (LWG), the world’s leading sustainability assessment system for leather manufacturers.

A common misconception is that LWG imposes foreign environmental standards on leather-producing countries. In reality, it does not set environmental laws. Instead, it assesses whether a tannery complies with the environmental regulations of its own country while adopting internationally recognised best practices. LWG certification should therefore be seen as internationally accepted verification of environmental compliance and responsible manufacturing.

For Bangladesh, this distinction matters. The Environment Conservation Act and the Environment Conservation Rules 2023 provide the legal framework for pollution control, environmental clearance, wastewater discharge, waste management and environmental monitoring. Many requirements assessed under the LWG protocol closely match these regulations. As a result, investment in complying with Bangladeshi environmental laws also strengthens readiness for LWG certification.

The LWG Leather Manufacturer Audit covers environmental and operational indicators including environmental management systems, chemical management, traceability, water use, energy efficiency, air emissions, waste management, occupational health and safety, emergency preparedness and governance.

Modern leather production depends on a wide range of chemicals throughout tanning and finishing. International buyers expect manufacturers to maintain strict control over chemical storage, handling, use and disposal. Effective chemical management reduces environmental risks, improves workplace safety, enhances product quality and supports sustainable production.

Water management is another key part of the certification process. Leather manufacturing requires large amounts of water. Tanneries that monitor consumption, adopt cleaner production techniques, recycle water where practical and reduce waste demonstrate environmental responsibility and operational efficiency. Buyers are also placing greater emphasis on energy efficiency as they seek suppliers with lower carbon footprints.

Traceability is one of the fastest-evolving parts of the LWG framework. Global brands increasingly want visibility across their supply chains to ensure responsible sourcing and meet sustainability commitments. Bangladesh has a natural advantage because most raw materials come from domestic livestock. Stronger traceability systems can improve transparency and increase buyers’ confidence.

Waste management and effluent treatment remain the biggest environmental challenges for Bangladesh’s leather industry. The tanning process generates large volumes of wastewater, sludge and other by-products that require proper treatment, disposal or recovery.

The relocation of tanneries from Hazaribagh to the Savar Tannery Industrial Estate was a major environmental reform. The estate was designed to support cleaner leather production through shared infrastructure, including a CETP. Although progress has been made, further improvements are needed in CETP performance, sludge management, hazardous waste handling, chromium recovery and environmental monitoring. These issues increasingly shape how international buyers judge a country’s commitment to sustainable leather production. Better environmental infrastructure strengthens not only regulatory compliance but also industry reputation, market confidence and long-term competitiveness.

The future of Bangladesh’s leather sector will depend on its ability to demonstrate environmental responsibility. Sustainable production is no longer optional. By strengthening compliance with national environmental regulations and expanding LWG certification, Bangladesh can establish itself as a trusted source of responsibly produced leather.

The writer is former director of the Institute of Leather Engineering and Technology

The ongoing forensic audit of key official statistics disclosed during the previous governments, including gross domestic product (GDP) and the consumer price index, is likely to be completed this month, according to an official.

A seven-member committee, led by Statistics and Informatics Division (SID) Secretary Md Firoz Sarker, is carrying out the audit on data produced by the Bangladesh Bureau of Statistics (BBS). The panel includes five government officials and two Dhaka University professors.

Once completed, the report will be submitted to Prime Minister’s Finance and Planning Adviser Rashed Al Mahmud Titumir. The audit comes after debate over Bangladesh’s official economic growth figures during the Awami League government.

The interim government had formed an expert taskforce to assess the quality, transparency and accessibility of official statistics. After taking office, the BNP-led government said it was prioritising an in-depth investigation and review to determine whether any official data had been incorrect or distorted.

The committee is reviewing historical GDP and consumer price index data, cross-checking BBS figures against the Bangladesh Bank records to verify sector-wise estimates

As part of that process, the SID-led committee was due to submit its report by July 15. However, it missed the deadline and now needs more time, according to planning ministry sources.

The committee is reviewing historical GDP and consumer price index data, cross-checking BBS figures against the Bangladesh Bank records to verify sector-wise estimates. It is also assessing progress on the Open Government Data initiative.

“It is a very challenging exercise because we are tracing the figures back to the source data,” said a committee member on condition of anonymity.

The committee is revisiting the GDP estimates for each financial year based on the 2005-06 base year. “Given the debate surrounding these figures, this work will be very important,” the member said.

He said the review is taking longer than expected because of the scale of the verification.

“This is a huge research exercise. We are sitting down to examine where every figure came from,” he said, adding that the team hopes to finish within the month.

Another committee member said the review is focused on strengthening the methodology rather than revisiting past growth figures.

“Our main objective is to identify methodological loopholes in GDP estimation and determine how they can be closed so that the statistics are produced more accurately,” he said.

As part of that work, the team is tracing how estimation methods evolved from the 2005-06 GDP base year to the 2015 base year and through later revisions to identify where weaknesses may have emerged.

“Our task is not to validate the populist speculative claims but to ensure the methodology is strong enough so that such concerns cannot arise in future.”

He said the review has already uncovered cases of incomplete documentation.

“In many cases, there are no records explaining how certain figures were generated. We are trying to identify those gaps so the process becomes more transparent and reliable,” he said.

“If the methodology or the process is weak, any government could face the same problem. Our objective is to strengthen the system itself,” he said.

In June, State Minister for Planning Zonayed Abdur Rahim Saki said that all past data was being re-examined.

“It is being looked into whether any information has been manipulated. The government is now emphasising in-depth investigation and review to identify incorrect and distorted data,” he said.

The Bangladesh Securities and Exchange Commission (BSEC) has instructed the Dhaka Stock Exchange (DSE) to ensure that stockbrokers and merchant banks submit quarterly reports on negative equity, unrealised losses and related provisioning.

The move follows the discovery that several margin lenders failed to comply with a regulatory order issued in November, requiring quarterly submissions alongside board-approved action plans.

According to BSEC data, the total provisioning deficit against negative equity and unrealised losses stood at Tk9,367 crore as of May.

Under the November directives, stockbrokers, dealers and merchant banks must continue submitting the reports until the issue is fully resolved.

During the provisioning period, no new securities may be purchased through Beneficiary Owner (BO) accounts with negative equity, although existing holdings may be sold at fair market value for adjustment.

Lenders are also barred from charging interest on margin loans or portfolio management fees on such accounts and, during the extended period, may not declare or distribute cash dividends.

BSEC sources said some lenders obtained deadline extensions after submitting action plans, while others failed to do so and were required to complete full provisioning by December 2025.

In a letter issued last week, the commission asked the DSE to ensure all stockbrokers and merchant banks submit the prescribed quarterly reports within 10 days of the end of each calendar quarter.

BSEC Spokesperson Abul Kalam told The Business Standard, "We asked the bourses to take measures to ensure proper submission of reports to the commission."

Sumit Podder, secretary general of the Bangladesh Merchant Bankers Association (BMBA), said, "Negative equity and unrealised losses are a long-standing problem that will not be solved easily."

"Despite that, we have improved a lot in terms of maintaining provisions, as the majority of institutions received deadline extensions," he said, adding, "If the capital market performs well in the future, we hope all the lenders currently bearing these woes will be able to overcome them."

Tk10,978cr in negative equity

BSEC documents show total negative equity stood at Tk10,978 crore at the end of May. Negative equity arises when the market value of assets securing margin loans falls below the outstanding loan balance.

Of the total, Tk7,820 crore was principal and Tk2,726.87 crore accrued interest, indicating that continued interest charges significantly contributed to the problem. Although many loans remained unrecovered, lenders continued charging interest until BSEC barred the practice for BO accounts with negative equity.

Against the total negative equity, stockbrokers and merchant banks maintained Tk3,668.46 crore in provisions, leaving a Tk7,309.61 crore shortfall.

Among them, 102 DSE trading right entitlement certificate (TREC) holders extended Tk6,033 crore in margin loans, comprising Tk4,935 crore in principal and Tk1,116 crore in interest, while maintaining Tk1,810.22 crore in provisions. Merchant banks kept Tk1,855 crore in provisions against their Tk4,920 crore in negative equity.

Tk2,058cr deficit in unrealised losses

BSEC documents show unrealised losses reached Tk4,042 crore as of May. Unrealised losses occur when an asset's market value falls below its purchase price without being sold.

Portfolio managers are required to maintain provisions against such losses, but prolonged market volatility has eroded portfolios and weakened their ability to meet provisioning requirements.

Against the Tk4,042 crore in unrealised losses, brokerage houses and merchant banks maintained Tk1,984 crore in provisions, leaving a Tk2,058 crore deficit.

The Dhaka Stock Exchange (DSE) staged a robust recovery yesterday, with the benchmark index gaining 41 points to settle at 5,898, just a fraction away from the psychological threshold of 5,900.

This rebound follows a brief period of corrective momentum and was primarily fuelled by renewed investor optimism regarding potential favourable revisions to the proposed margin lending rules, according to market insiders.

Market participation saw a healthy spike as total turnover jumped by 17% to reach Tk1,129 crore, indicating that liquidity is flowing back into the secondary market with renewed vigour.

According to the daily market review by EBL Securities, the capital bourse maintained a firm upward trajectory from the opening bell. The surge was driven by sustained buying interest and strengthening investor participation, which led to broad-based price appreciation across the majority of traded scrips, it said.

A significant highlight of the day was the stabilisation of the insurance sector, which had faced heavy selling pressure in recent sessions, said EBL Securities. Investors appeared to be banking on potential regulatory easing regarding marginable criteria for insurers, while simultaneously rotating their interest toward non-bank financial institution (NBFI) stocks in anticipation of short-term gains, it added.

Sheltech Brokerage Limited noted that the session's performance was shaped by this renewed buying interest following the recent correction. Early momentum pushed the DSEX to an intraday high of 5,915.68 points.

Although orderly profit-taking led to a moderate pullback in the mid-session, the underlying buying pressure remained sufficiently strong to absorb the sell-offs, allowing the benchmark index to ultimately retain most of its early gains, it said.

The upcoming half-year earnings season is also serving as a psychological catalyst, prompting investors to take positions in fundamentally strong stocks, said Sheltech Brokerage.

On the sectoral front, the textile sector dominated market activity, accounting for 18.4% of the total turnover, followed by the pharmaceutical and banking sectors.

Market breadth was overwhelmingly positive, with 294 issues advancing compared to only 58 that declined, while 41 remained unchanged.

Almost all sectors posted positive returns, with mutual funds leading the gains at 4.5%, followed by financial institutions at 3.6% and the tannery sector at 2.4%. In contrast, only the services and pharmaceutical sectors faced marginal corrections of 0.5% and 0.1%, respectively.

Individual stock performance was highlighted by National Polymer, which topped the gainers' list with a 9.94% jump. It was followed by several mutual funds, including IFIC Bank 1st Mutual Fund, Exim Bank 1st Mutual Fund, and MBL First Mutual Fund, all of which saw robust price appreciation.

On the liquidity front, Queen South Textile Mills emerged as the most-traded stock, followed by Malek Spinning, LankaBangla Finance, IPDC Finance, and Dragon Sweater.

On the losing side, Islami Insurance and ACI Formulation were among the few scrips that faced notable corrections.

The bullish sentiment was mirrored at the Chittagong Stock Exchange (CSE), where the key indices also settled in green territory. The broad CASPI index rose by 60 points to settle at 15,798, while the Selective Categories' Index (CSCX) gained 37 points. Trading activity at the port city bourse saw a significant 71% jump, reaching a turnover of Tk19 crore.

Bangladesh has decided to participate in 50 international trade fairs across 27 countries in the current fiscal year, prioritising exhibitions featuring products from 12 sectors as part of efforts to attract more international buyers.

The decision was taken at a meeting of the Export Promotion Bureau (EPB) at its office in Dhaka.

The meeting also fixed January 1 as the opening date for the 31st edition of the Dhaka International Trade Fair (DITF) next year, according to a statement released by the commerce ministry yesterday.

Many businesses, especially small and medium-sized enterprises, do not have the financial capacity to explore foreign trade opportunities, Commerce Minister Khandakar Abdul Muktadir said at the meeting.

Participation in international trade fairs will help improve the business networking opportunities for these entrepreneurs, he said.

Leather and leather goods, light engineering. and agro-processing have the potential to achieve double-digit export growth, Muktadir said.

Today’s large companies started out as small businesses, so new entrepreneurs and startup founders should be provided with opportunities to grow in the future, he said.

The minister also reiterated that the government has been working to cut red tape and create a business- and investment-friendly environment in the country, the statement said.

Southeast Bank reported that its consolidated net profit jumped by 64% in the first half of this year.

According to its price-sensitive statement approved at a board meeting held today (21 July), the bank posted the consolidated net profit of Tk218.77 crore in January-June of 2026, which was significantly higher from Tk133.53 crore in the same period of 2025.

During the first half, its consolidated earnings per share stood at Tk1.64, which was Tk1 a year ago.

The bank said net profit increased due to higher investment income and lower provisions against loans and advances compared to the previous period.

Pressures of climate-change impacts on Bangladesh's balance-of-payments (BoP) situation haunts their mind as an International Monetary Fund (IMF) team begins diagnosing in-depth the country's climate policy before framing a new lending package, sources say.

In the previous US$5.5-billion credit programme for Bangladesh, the IMF had earmarked US$1.3 billion under the Resilience and Sustainability Facility (RSF) arrangement.

However, the Fund had disbursed funds totaling $887 million under the RSF before Bangladesh new administration announced the scrapping of the programme while seeking a new lending arrangement.

Officials have said a six-member team of the IMF, led by Senior Economist Suphachol Suphachalasai, is now in Dhaka on a two-week mission and having discussion with the officials of different ministries and divisions concerned on the climate issues.

As part of the spadework, they are assessing Bangladesh's climate-policy framework, climate-related fiscal arrangements, adaptation and mitigation policies, disaster-risk financing, and climate-finance architecture to develop findings and recommendations for the authorities concerned.

"Like the previous loan programme, impacts of climate change on Bangladesh's overall economy and steps for mitigation will get priority in the proposed new programme," a senior finance division official told The Financial Express Tuesday.

He said the IMF team, thus, is now diagnosing the overall climate-related measures Bangladesh now pursues to fight its impacts.

Finance officials say Bangladesh is one of the most vulnerable countries to the adverse impacts of climate change, even though it accounts for less than 0.43 per cent of global greenhouse-gas emissions.

The country's climate-relevant budgetary allocation is rising every year to cope up with the impacts of climate change. In the current fiscal year, the government has allocated some Tk 517 billion in favour of 25 ministries and divisions for taking measures to fight climate-related challenges, up from the previous year's allocation of Tk 469 billion.

Data show while adaptation continues to receive the largest share of climate financing, with allocations coming to Tk 389 billion in the current fiscal year, the country is also spending a significant amount of Tk 99.25 billion for mitigation efforts.

According to different estimations, climate change costs Bangladesh between $3.0 billion and $4.0 billion each year in direct disaster-related damages. The economic losses reach up to $24 billion per annum when taken into account the extreme heat and reduced labour productivity that severely impacts agriculture and informal labour sectors.

"The significant budgetary spending to fight the impacts of climate change puts severe pressures on Bangladesh's economy, minimising scopes to finance development works of the country," another finance official said.

Sources have said at the meetings with the finance division officials this week the IMF team took stock of climate-and disaster-related works, status of Bangladesh Climate Development Partnership (BCDP), National Strategy for Disaster Risk Financing, the considerations of climate-related risks in macro-fiscal planning, budgeting and allocations of climate- and disaster-related spending, and subsidies on fossil fuels, electricity, and water supply.

At the National Board of Revenue, they inquired about tax policies related to electricity, fossil fuels, and petroleum products, and tax policies on natural and mineral resources, source said.

The IMF team at the Power Division discussed power-sector policies and strategies, renewable energy and energy efficiency, power-sector performance and reform roadmap, electricity subsidies, including capacity charge, electricity-tariff structure, and electric vehicle-sector development and implications.

At the ministry of environment, the visiting team discussed climate-related strategies, laws, and policies, NDC 3.0 and NAP implementation, status of Bangladesh Climate Development Partnership (BCDP), Bangladesh Climate Change Trust Fund, Bangladesh Climate Change Resilience Fund and sustainable forest management.

Sources said at the meeting with central bank officials, they also took updates on climate-related financial-sector policy and initiatives, sustainable financing and climate finance, role of banks and financial institutions in climate-and disaster-risk management, and financial-sector resilience and climate-stress testing.

The Bangladesh Securities and Exchange Commission (BSEC) has drafted new rules to make margin lending easier, allowing investors to borrow money from their brokerage to buy shares, using shares they already own as collateral.

The draft has been published for stakeholder comment. BSEC argues that rules brought in by the previous commission made these loans too hard to get.

Under the new proposal, whether a stock qualifies for margin lending would depend on things like the company’s book value and how regularly it has paid dividends.

The real question is whether relaxing these rules will actually help the market. While it may inject some liquidity into the stock market in the short term, could it also create greater risks over the longer term?

It is worth recalling that the previous commission’s primary justification for tightening the flow of margin loans was that many investors had borrowed money to purchase shares but failed to manage their leveraged positions properly, resulting in significant losses.

That’s the basic danger of a margin loan. The money has to be paid back no matter what happens to the share price. If the price falls far enough, the broker is supposed to sell the borrower’s shares automatically to recover the loan -- this is called “forced selling.”

When many investors are in this position at once, forced selling by one can push prices down further, which triggers more forced selling elsewhere, and the whole market slides.

The aftermath of the 2011 stock market crash -- one of the worst in Bangladesh’s stock market history -- offers an important lesson. At that time, brokerage houses were not allowed to execute forced sales of clients’ shares.

Many brokers ended up owing more than their clients’ accounts were worth -- what’s called “negative equity” -- and some still haven’t recovered. The episode also placed the capital market under prolonged stress.

So, what is the solution? Margin loans exist in stock markets all over the world, and normally that’s fine. However, in a market like Bangladesh, where there is a shortage of fundamentally strong listed companies and investors often speculate on manipulated stocks, borrowing money to invest in equities is extremely risky. Borrowing to invest in that kind of market doesn’t only put individual investors at risk but it can also leave brokerages and other institutions exposed if they cannot force-sell in time.

The real problem, hence, becomes the question about whether forced selling can actually be executed if market conditions warrant it. In Bangladesh, the pattern has been that investors take margin loans to buy speculative stocks, and when prices fall and their shares are due to be sold off, they often take to the streets to protest instead.

In a market investors hold such a mindset, margin lending isn’t just a risk-management issue, it can turn into a political headache for the government, since forced selling has a history of triggering street protests. So why is BSEC moving to ease it?

There seem to be two justifications. One is that it should be up to lenders and borrowers to weigh their own risk before extending or taking a loan. But that only works if investors act rationally. Irrational, herd-driven investing is one of the well-known weaknesses of Bangladesh’s stock market.

The second argument could be that easier loans mean more money flowing into the market, which should boost trading activity. However, the local capital market’s problem isn’t a shortage of money, it’s a shortage of good companies to invest that money in. Pumping in more borrowed cash without more solid companies to absorb it is unlikely to produce sustainable benefits. In the long run, it may not serve anyone’s interests.

The proposed framework for which stocks qualify for margin loans -- book value, dividend history -- raise another concern: how reliable are those financial indicators? After all, investors relied on the published financial statements of several Islamic banks when purchasing their shares over the last decade. Some of these banks were classified as Category A companies, consistently paid attractive dividends, and reported strong earnings per share. Later, it turned out the banks’ financial statements had been inflated, and the real value of those shares collapsed.

In such an ecosystem, why should capital market intermediaries also be exposed to additional risks by extending margin loans?

To be fair, plenty of listed companies do report genuine, trustworthy profit and book-value figures, and those numbers are still useful. But they shouldn’t be the only test for whether a stock is safe to buy on margin. Other checks are needed too.

Most importantly, until Bangladesh’s financial reporting and credit rating systems are more reliable, margin loans shouldn’t be made easier for small investors to get.

There’s also the matter of financial literacy. Many retail investors in Bangladesh don’t fully understand what they’re signing up for when they take a margin loan, which is part of why forced selling triggers protests instead of acceptance.

The problem extends beyond investors alone. In a country where the finance minister himself instructed market participants in 2012 not to execute forced sales even when portfolio equity fell below the prescribed threshold, and where the BSEC also discouraged forced selling, it is legitimate to question whether margin lending is an appropriate product for the country’s capital market.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

More than half the companies listed on Bangladesh’s stock exchanges fall into the two lower-quality tiers -- Category B and Category Z. Making margin loans easier to get in a market this heavy with weaker companies is unlikely to do much long-term good. It’s more likely to generate business for brokers and other intermediaries while adding risk to the system as a whole.

A better policy focus for the government would be attracting more genuinely strong companies to list on the stock exchange in the first place. Once high-quality companies are listed, investors will naturally return, and liquidity will improve without artificial stimulus. Capital naturally flows to opportunities where sustainable returns are available.

Equity investment should ideally be financed through personal savings rather than borrowed money. If equity investments are increasingly funded by debt, the very nature and purpose of equity financing become distorted.

It’s true that easing margin loans could give the market a short-term lift. But, from the long-term perspective, keeping margin lending as limited as reasonably possible is likely to be a healthier policy for a market like Bangladesh.

Lastly, since stocks are volatile assets, that volatility, if it moves upward, allows for rapid wealth creation through margin loans. However, when the market becomes in a falling trend, investment can evaporate very fast. Are our investors ready for that?

The upbeat remarks came after official General Administration of Customs figures showed a sharp turnaround in bilateral trade in goods. After slumping 18.7 percent year-on-year in the first quarter, China-US goods trade rebounded to post a 13.7 percent year-on-year gain in the second quarter.

This trade recovery aligns with fresh bilateral moves to stabilize economic relations. The Ministry of Commerce confirmed that during the latest round of China-US economic and trade consultations held in May, the two sides reached an agreement to negotiate a reciprocal tariff cut framework via a newly established trade council. The deal would cover goods valued at $30 billion or more from each country.

Although neither side has released a final product list, trade analysts expect the tariff cuts to cover textiles, footwear, consumer goods, electronic components, industrial machinery parts, chemicals, plastics and agricultural products, while excluding sectors such as advanced semiconductors and strategic resources.

Diao Daming, a professor of international relations at the Beijing-based Renmin University of China, said recent progress in the China-US economic and trade talks has helped bolster business confidence across the world and is creating conditions for more predictable trade and investment.

Yu Xinding, a professor of international trade at the University of International Business and Economics in Beijing, said that once implemented, the new tariff framework will support further growth in China-US trade while setting a positive example for resolving trade disputes through dialogue.

“Faced with multifaceted costs triggered by tariffs, this move offers a practical solution to help reverse trade distortions created by previous tariffs,” said Yu. “The initiative goes far beyond lowering tariffs on selected goods. Equal consultations will improve market access, ease corporate burdens and restore bilateral trade to market-oriented, mutually beneficial dynamics.”

Though modest relative to overall China-US trade, the planned tariff relief targets products with clear market demand and practical benefits, delivering early, verifiable results that can strengthen confidence in two-way economic ties, she added.

While the recent rebound in bilateral trade points to improving momentum, analysts cautioned that the relationship remains subject to structural challenges and external uncertainties, despite the progress made through dialogue.

Ma Xue, a researcher at the Institute of American Studies at the China Institutes of Contemporary International Relations, said that strategic competition between China and the US in high-tech sectors will continue to intensify, while tighter controls on semiconductors, artificial intelligence and critical minerals, alongside geopolitical tensions, could weigh on the bilateral trade climate.

“Overall, institutionalized consultations and differentiated management of disputes could help offset short-term political disruptions,” Ma said. “Although disagreements and periodic bargaining will persist, structured cooperation, accompanied by occasional friction in specific sectors, is likely to become the new normal in bilateral economic ties.”

Data from the General Administration of Customs also showed that China-US goods trade reached 2 trillion yuan ($295 billion) in the first half of the year, accounting for 7.9 percent of China’s total foreign trade.

James Zimmerman, chairman of the American Chamber of Commerce in China, said he hopes this year will be a productive one for China-US relations, noting that current China-US trade policy is increasingly characterized by a “managed trade” approach centered on reciprocity.

Saying that engagement is in the best interest of the US, Zimmerman reiterated that China brings real value to US consumers and benefits Washington’s long-term economic interests.

Similar views were expressed by Jim Sutter, CEO of the US Soybean Export Council. “The recent announcement on tariff reductions is a positive signal. We hope the commitments made during the talks will soon be translated into concrete policy measures,” he said.

Such optimism also resonates with US industrial companies stepping up long-term investment and innovation in China. Lin Chunmei, president and general manager of Corning China, said that as AI reshapes the global industrial landscape and drives demand for advanced materials and computing infrastructure, the US industrial materials manufacturer has evolved from technology introduction to collaborative innovation in China.

Corning will deepen local innovation, support next-generation computing infrastructure and contribute to the upgrading of China’s industrial ecosystem, she said.

The company’s confidence also comes as China continues to strengthen its position in advanced manufacturing and high-tech exports. In the first half of 2026, the country’s exports of integrated circuits surged 88.7 percent year-on-year, while exports of electronic components rose 62.6 percent, statistics from the Ministry of Industry and Information Technology showed on Monday.

The United States is set to impose new tariffs that could hit dozens of countries soon, trade envoy Jamieson Greer signaled Tuesday, with President Donald Trump's temporary global levies due to expire this week.

The Trump administration has prepared fresh tariffs targeting 60 trading partners over their alleged failures to act against forced labor, as officials push to rebuild the US leader's trade agenda after legal setbacks.

"We expect to see some action soon," Greer told CNBC when asked if new duties were incoming. He did not specify a timeline.

Trump imposed a 10-percent global duty this year after a swath of his tariffs were struck down by the Supreme Court in February, but this levy expires on Friday.

US proposes new tariffs on Bangladesh, 59 others over forced labour concerns

Analysts expect that new tariffs over forced labor concerns -- set between 10 percent and 12.5 percent -- would replace these temporary duties.

They come as Trump makes a renewed push to use tariffs as leverage against US trading partners, sparking fears of retaliation and diplomatic tensions.

Washington announced a fresh 25-percent duty on certain Brazilian goods last week, and on Monday unveiled a 50-percent levy on many Canadian products to take effect in 30 days.

Canadian Prime Minister Mark Carney said Tuesday that he was looking at "all options," adding that he and Trump had agreed to "intensify discussions" in the coming weeks on a possible deal.

On Tuesday, Trump announced a new 100 percent sector-specific tariff on imported generic drugs to take effect from August 2028, with that level rising to 200 percent in 2029.

For now, the US leader said the tariff on generic drugs would be cut to zero from August 2026, in an effort to build a window for the onshoring of such pharmaceutical production to the United States.

Forced labor concerns

Greer said Tuesday that new action on forced labor will cover the majority of US trade, with the moves likely to reignite trade tensions.

A 10-percent tariff rate would hit US imports from partners including Canada, the European Union, Mexico, Taiwan and the United Kingdom. They were found to have taken steps against forced labor.

Goods from over 40 other major economies like China, India and Japan face a 12.5 percent levy.

The EU previously said that it considers tariffs imposed on these grounds "unjustified."

Canada pressure

Washington's planned 50-percent tariff on Canada also comes as US-Mexico talks over a North American free trade pact intensify.

Washington recently declined to extend the accord in its current form.

Greer is set to travel to Mexico from Wednesday to Friday for discussions linked to a joint review of the US-Mexico-Canada Agreement (USMCA).

But negotiations with Canada have proceeded at a slower pace. Carney on Tuesday did not suggest that he would head to Washington for talks.

Some lawyers see Trump's use of an untested legal provision -- Section 338 of the Tariff Act of 1930 -- as a means to gain leverage over Canada in USMCA negotiations.

Trade lawyer Dave Townsend of Dorsey & Whitney added that higher tariffs "appear to be aimed at encouraging an agreement between Canada and the United States, or in retaliation for the failure to reach such agreement, or both."

The question, he said, is whether both sides will start a "cycle of escalation and retaliation."

Crucially, Trump's latest salvo will not exempt affected Canadian products entering his country under the USMCA.

Trump told reporters Tuesday that the Canada tariffs were unrelated to his earlier threats over wildfire smoke that descended into the United States.

Brazil tensions

US plans for a 25-percent tariff on Brazilian goods over accusations of unfair trade practices have separately drawn a sharp rebuke from the Latin American giant.

The levy is due to take effect Wednesday, while shaping up as a major campaign flashpoint just months before Brazil's presidential election.

A range of products like beef, coffee and certain aircraft parts will be exempted, as will some goods that the United States does not produce.

Still, the American Chamber of Commerce for Brazil recently warned that Washington's measure places Brazil among countries "facing the most restrictive conditions for access to the US market," affecting more than $11 billion in exports.

State-owned Biman Bangladesh Airlines is set to sign another multibillion-dollar agreement with European aerospace giant Airbus by 31 August to purchase 10 aircraft, adding a second major order to its recent $3.7 billion deal with US manufacturer Boeing.

"The government has decided to proceed with the acquisition of 10 Airbus aircraft," State Minister for Civil Aviation and Tourism M Rashiduzzaman Millat told The Business Standard. "We hope to sign the agreement by 31 August."

"However, the Airbus aircraft will not be delivered immediately. Deliveries are expected to begin from 2031. Therefore, until the new aircraft arrive, we will have to strengthen the fleet by leasing aircraft," he added.

Millat said details of the procurement, including the price and other terms and conditions, would be disclosed after the agreement is finalised, adding that negotiations are going on.

Talks advance at Farnborough Airshow

The proposed deal gained momentum at the Farnborough International Airshow 2026 in the United Kingdom, where Airbus and Biman officials met yesterday to discuss the timeline for signing the agreement, according to Airbus sources.

"The meeting at the Farnborough Airshow discussed the progress of the proposed agreement and the next steps in the timeline," an Airbus spokesperson based in South Asia told TBS.

He said the national flag carrier had sent a letter to Airbus this week expressing its intention to sign the agreement by 31 August.

"This is the first time we have received a clear commitment from Biman," the spokesperson said.

Biman Managing Director and Chief Executive Officer Kaizer Sohel Ahmed, accompanied by four senior officials from flight operations, engineering and corporate planning, travelled to the UK on 19 July to attend the airshow.

Airbus Vice President Edward Delahaye also recently met Civil Aviation and Tourism Minister Afroza Khanam, State Minister Millat and senior Biman officials in Dhaka to advance discussions on the proposal.

Fleet expansion plans

The proposed purchase comes as the government reviews a long-term roadmap to expand Biman's fleet to 47 aircraft by the fiscal 2034-35 as part of efforts to modernise the flag carrier, strengthen international connectivity and establish Bangladesh as a regional passenger and cargo hub.

Biman currently operates 19 aircraft, 14 of which are manufactured by Boeing. With the addition of the Boeing and Airbus orders, the fleet would expand to 43 aircraft.

Because neither manufacturer is expected to deliver new aircraft before 2030, Biman plans to lease 10 aircraft by next year to address its fleet shortage.

Industry insiders said Bangladeshi airlines are expanding their fleets in anticipation of rising passenger demand and additional capacity following the expected opening of Hazrat Shahjalal International Airport's Third Terminal later this year.

Board approval still pending

Although the government has publicly expressed its interest in purchasing Airbus aircraft, the deal still requires internal corporate and government approvals, according to Airbus.

"Although Biman's Board had earlier given policy approval on certain aspects, the issue of the down payment has not yet been finalised. Therefore, the proposal will have to be placed before the Board again before the agreement can be signed," the Airbus spokesperson said.

He added that advance payments are standard international practice in aircraft procurement, with around 1% of the total contract value typically paid upfront, although the amount may vary depending on negotiations.

Biman acting spokesperson Md Mohiuddin confirmed that the government approval process is underway.

Asked about the price of the aircraft, the Airbus spokesperson said: "We cannot make the price public because of legal obligations. However, the customer may disclose it after the agreement is signed."

According to aviation news portal Simple Flying, Airbus's flagship A350-900 wide-body aircraft had a list price of $317.4 million in late 2023, while the larger A350-1000 was listed at $366.5 million. The A320ceo carried a list price of $101 million, while the A320neo was priced at $110.6 million.

Airbus revises proposal

According to Airbus and Biman sources, the European manufacturer has revised its proposal, reducing its earlier offer from 14 aircraft to 10 following Biman's agreement with Boeing in April.

The latest proposal, submitted to Biman's techno-finance committee, includes four A350-900 wide-body aircraft and six A321neo narrow-body jets.

The revised offer comes less than three months after Biman signed a $3.7 billion agreement with Boeing on 30 April to purchase 14 aircraft, including eight Boeing 787-10 Dreamliners, two Boeing 777-9 aircraft and four Boeing 737 MAX aircraft.

Airbus and Boeing have competed for a place in Biman's future fleet for several years, attracting considerable diplomatic and commercial interest from both the United States and Europe.

Debate over a mixed fleet

Former Civil Aviation Authority of Bangladesh chairman Air Vice Marshal (retd) M Mafidur Rahman said he supports a mixed fleet comprising both Boeing and Airbus aircraft.

According to Rahman, reliance on a single manufacturer exposes airlines to operational risks if one manufacturer's aircraft encounter technical or regulatory problems.

However, he cautioned that operating aircraft from two manufacturers would increase maintenance costs, training requirements and technical complexity.

"A mixed fleet certainly involves additional costs. But with proper planning, it also offers strategic advantages. The most important thing is that Biman prepares a comprehensive commercial and operational plan so that the government and the public clearly understand the benefits expected from this investment," he said.

Rahman added that Biman has significant opportunities to expand revenue and strengthen its international competitiveness, but that achieving those goals would require professional management, policy continuity and a long-term strategy.

Europe's long campaign

Industry insiders said Airbus scaled back its original proposal as part of a strategic effort to remain competitive in Bangladesh's long-term fleet expansion programme.

The company had earlier proposed supplying 14 aircraft, including 10 A350 wide-body jets and four A320neo narrow-body aircraft.

Diplomats from France, the United Kingdom and Germany have repeatedly encouraged Bangladesh to consider Airbus aircraft as part of a balanced procurement strategy.

Airbus's campaign gained momentum in 2023 following French President Emmanuel Macron's visit to Bangladesh and references in the Bangladesh-UK Joint Statement to the possible acquisition of 10 Airbus A350 aircraft, including freighters.

On 4 November last year, the ambassadors and high commissioners of France, Germany, the United Kingdom and the European Union publicly urged Biman to diversify its Boeing-heavy fleet, arguing that a more balanced mix would improve operational resilience and competitiveness.

According to people familiar with the matter, at least two high-level meetings involving European envoys and senior officials from Bangladesh's aviation sector were held this month to discuss the proposal.

TSMC is seeing strong, multi-year demand for its AI chips as it invests a further $100 billion to expand its Arizona facilities,

but it needs to address several challenges, such as a shortage of construction workers there, a top executive said.
Speaking after blockbuster second-quarter results on Thursday, Chief Financial Officer Wendell Huang said the company is “very happy” with progress in Arizona,which is why it decided to ramp up investment to $265 billion.“We will continue to invest,” he said in an interview, adding that the company was very grateful for US government support.“We continue to see customers’ strong demand — multi-year structural demand.”The world’s main producer of advanced AI chips and a major Nvidia supplier, TSMC’s aggressive capital spending and soaring profit marginshave made it a barometer of demand in the global semiconductor industry.

The pledge to expand in Arizona is a win for US President Donald Trump, who has pushed for more chipmaking at home.

Trump has repeatedly accused Taiwan of stealing American semiconductor business.

He has said that by the time he leaves office, the US will have 50 percent of the world’s semiconductor manufacturing capacity.

ARIZONA FABS

TSMC’s first Arizona fabrication plant — or fab — is operational and achieving yields “as good as” the flagship fab in Taiwan, Huang said.

The second fab will shortly begin moving in equipment, while construction of a third fab is under way

and preparatory work has started on a fourth fab and the site’s first advanced packaging facility, Huang said.

In total, current and planned projects will bring TSMC’s Arizona footprint to 12 fabrication and advanced packaging facilities plus an R&D centre.

He did not provide a timeline for the latest investment.

However, “there are physical constraints — the number of construction workers available, the infrastructures available,” Huang said.

“We’ll work closely with the government to solve these issues.”

At the same time, TSMC continues to invest at home, where it is building 13 leading-edge and advanced packaging fabs over the next several years.
Google News LinkFor all latest news, follow The Daily Star's Google News channel.

“Land is a scarce resource in Taiwan,” Huang said.

“Therefore, whenever there are available lands, we will use them for the most leading-edge technologies.”

“When you ramp the most leading-edge technologies, you need very close collaboration between the R&D and operation functions,” he added.

“It has to be in Taiwan. And after it stabilizes, then we can consider transferring overseas.”

BOND ISSUANCE

Asked if the company would consider raising money by selling new shares in the US, Huang said it would “not rule out issuing new bonds”

if market conditions are favourable.

Despite its aggressive expansion plans, TSMC faces headwinds from geopolitical tensions between Washington and Beijing,

with the US seeking to control advanced chip exports to China.

Reuters reported last year that TSMC could face a penalty of $1 billion or more to settle a US export control investigation

over a chip it made that ended up inside a Huawei AI processor.

Huang referred questions about the status of the case and any potential penalty to the US government,

but said TSMC’s internal export control system was constantly being reviewed.

“I have to say there is (only) so much we can do in terms of complying with all the rules and regulations,

but when the customers sell to customers, they sell to customers,” he said.

“At some point in time, you lose the visibility. That’s the reality.”

Investors worries about the sustainability of the AI boom amid massive infrastructure spending has re-emerged recently.

TSMC’s Taipei-listed shares fell 7.3 percent on Friday despite the company’s record results.

Even so, its shares remain up nearly 50 percent this year.

While TSMC has long been by far the market leader in making the world’s most advanced chips, competitors are seeking to narrow the gap, including Samsung Electronics, which has benefited from a recovery in the memory chip market,and Intel, which enjoys backing by the US government.

Huang said the company remains confident in its business model.

“We do not intend to leave anything on the table,” he said.

“Our competitors are good, but we are even better.”

Reporting by Wen-Yee Lee and Ben Blanchard; Editing by Kevin Buckland

Bangladesh's GDP growth slowed to 2.22% year-on-year at constant prices in the third quarter (January-March) of FY2025-26, down from 4.53% in the corresponding quarter of the previous fiscal year.

The Bangladesh Bureau of Statistics (BBS) released the third-quarter GDP estimates for FY26 today (20 July).

According to the quarterly data, the economy grew by 4.96% and 3.03% in the first and second quarters of FY26, respectively, compared with 3.91% and 3.53% in the corresponding quarters of the previous fiscal year.

At current prices, the size of the economy reached Tk15.391 trillion in the third quarter of FY2025-26, up from Tk14.192 trillion in the same quarter a year earlier.

BBS data show that growth slowed across all three major sectors – agriculture, industry and services – compared with the same period of the previous fiscal year.

Agricultural sector growth declined to 1.74% in the third quarter, from 4.61% a year earlier. The sector had grown by 2.11% and 3.68% in the first and second quarters of the current fiscal year, compared with -0.12% and 1.90% in the corresponding quarters of FY2024-25.

The industrial sector recorded negative growth of 0.28% in the third quarter, a sharp reversal from 3.33% growth in the same period last year. However, the sector had expanded by 6.82% and 1.27% in the first and second quarters of FY2025-26, compared with 4.80% and 5.78% in the corresponding quarters of the previous fiscal year.

Growth in the services sector slowed to 3.52% in the third quarter from 7.32% a year earlier. During the first and second quarters of the current fiscal year, the sector grew by 4.51% and 4.45%, compared with 4.49% and 5.84%, respectively, in the same quarters of FY2024-25.

Economists said the slowdown across all three major sectors in the third quarter, particularly the contraction in industry, signals growing concerns for the economy.

Dr Sayema Haque Bidisha, professor of economics at the University of Dhaka, said it would be inappropriate to draw policy conclusions based on GDP growth data from a single quarter.

"Quarterly growth figures are heavily influenced by the base effect – the level of growth recorded in the same quarter of the previous year. If growth was unusually high or low in the base period, the current year's growth rate may appear disproportionately different. Therefore, one quarter's data alone should not be used to assess the overall state of the economy," she said.

Bidisha added that the broader economic context of the January-March quarter should also be considered.

"National elections were held during this period, which may have affected normal economic activity and, consequently, GDP growth," she said.

However, she identified the negative growth in the industrial sector as the most worrying development.

"This is a warning signal for the economy and calls for prompt policy intervention. While very high agricultural growth is not expected, post-election changes in supply chains may also have had some impact," she said.

According to Bidisha, the performance of the industrial sector in the April-June quarter will be crucial. "If growth remains weak, major policy and strategic measures will be needed to revive the sector, as industrial growth is directly linked to employment, industrialisation and the country's overall economic expansion," she said.

Bangladesh's economic growth was on a slide as the latest official count found it 2.22 per cent in the third quarter of the just-past fiscal year, in a headlong fall from 4.53 per cent estimated in the same period of previous fiscal.Maps

The primary driver behind this significant deceleration is a contraction in the industrial sector, alongside cooled growth across agriculture and services, official data showed on Monday.

The drastic fall in the industrial growth in January-March has affected the economic-growth momentum of the country as Bangladesh Bureau of Statistics (BBS) in its provisional estimation has recorded a negative 0.28-percent rate.

In the same period of the previous fiscal year (FY2025), the industrial growth was recorded at 3.33 per cent as per the BBS data.

The latest figure marks a continuing downward trajectory for the just-concluded FY2026, following a 4.96-percent growth in the first quarter and 3.03-percent growth in the second quarter.

Meanwhile, in its provisional estimation, BBS had recently shown Bangladesh's GDP could grow at a 4.14-percent rate in the past fiscal year in an upturn from a slower 3.49 per cent in the previous year (FY2025).

Analysts say the slower growth in the Q3 last fiscal may hamper the achievement of the 4.14-percent overall annual GDP growth.

According to the statistical bureau, the industrial sector experienced a negative growth of -0.28 per cent in the third quarter at constant prices, comparing poorly to the 3.33-percent growth recorded during the third quarter of FY2024-25.

Within this vital sector, manufacturing growth dipped into negative territory, to 0.34 per cent, while utility sectors like electricity, gas, and water supply experienced a deeper contraction to -3.56 per cent.

This industrial slump severely impacted the overall economic output during the January-March period.

Other key pillars of the economy also registered slower growth. The services sector, which historically carries a heavy weight in the country's GDP, grew 3.52 per cent in the third quarter of FY2026.

While this remains the strongest performing macro-sector for the quarter, it represents a steep decline from the robust 7.32-percent expansion seen in the same quarter in the previous FY2025.

Similarly, the agricultural sector recorded a growth of 1.74 per cent in Q3 FY2026. Though positive, yet this is a sharp reduction from the 4.61-percent growth achieved in the 3rd quarter of FY2025, the BBS data showed.

In nominal terms, the estimated size of the Q3 GDP at current prices reached Tk 15.391 trillion, up from Tk 14.192 trillion in the corresponding period of FY2024-25.

At current prices, the sectoral share of the economy during this quarter was led by the services sector with 54.63 per cent, followed by the industrial sector at 35.51 per cent, and agriculture at 9.86 per cent.

Analysts point out that the negative growth in industrial sectors and utilities reflects ongoing constraints in domestic production, energy-supply challenges, and shifting demand dynamics.

A rebound in momentum in manufacturing in the final quarter of the fiscal year just gone by would need "targeted policy interventions", they felt.

In a press release today, the national standards body said the products were found to contain excessive preservatives, harmful microorganisms or other deviations from prescribed quality standards.

According to BSTI, Fresh Garden Agro Resources' mango pickle contained preservative levels above the permitted limit.

The Bellisimo Rotondo Hazelnut Coated Chocolate ice cream, produced by Kazi Food Industries Ltd, was found to contain total milk solids-not-fat above the level specified under the Bangladesh Standards.

Laboratory tests also detected harmful microorganisms in Olive Bangladesh Ltd's Labannya Milk Skin Lotion, Aloe Vera Skin Lotion, Olive and Labannya Facewash Moringa+Matcha, Foaming Milk & Tulsi, and Labannya Aloe Vera Shampoo.

Meanwhile, Dekko Foods Limited's Dekko Fruit Funda soft drink powder in Mango and Orange variants was found to contain less vitamin C than required under the Bangladesh Standards.

BSTI said the companies concerned have already been notified of the test results and instructed to suspend the production, sale and distribution of the affected products until their licences are renewed or reapproved.

The companies have also been directed to immediately withdraw the products from distributors, dealers, retailers and the market.

BSTI said it would closely monitor compliance with the directive and take legal action under existing laws if any company fails to comply.

The standards body said maintaining product quality in line with national standards is both a legal and ethical obligation for licensed manufacturers.

It added that administrative and legal measures would be taken against companies that fail to meet these requirements in order to protect consumers and safeguard the public interest.

BSTI Director General (Secretary) Kazi Imdadul Haque advised buyers to check the BSTI certification mark, licence number, manufacturing date, expiry date and other relevant information before making a purchase.

He also urged consumers to report any complaints regarding product quality, adulteration, fraud or misuse of the BSTI certification mark to the organisation.

While contacted, Kazi Food Industries Ltd said in a statement that the company appealed to BSTI on July 2 for a re-test of samples of its Bellisimo Rotondo Hazelnut Coated Chocolate ice cream following complaints that it contained total milk solids-not-fat above the level specified under the Bangladesh Standards.

"We have submitted the application for the re-testing as recommended by BSTI representatives. Kazi Food has full respect for the standards and regulations set by BSTI and is committed to complying with and implementing them properly."

British International Investment (BII), the UK’s development finance institution, has unveiled a new five-year strategy for Bangladesh, reaffirming its long-term commitment to supporting sustainable economic growth, private sector development and climate-focused investment in one of South Asia’s fastest-growing economies.

The 2026-2031 strategy, launched on Monday, builds on more than four decades of investment in Bangladesh and signals Britain’s intention to deepen its economic partnership with the country by supporting businesses that generate employment, improve resilience and accelerate the transition to a low-carbon economy.

BII, which has invested in Bangladesh since the early 1980s, currently manages a portfolio worth more than $270m in the country. Its new strategy prioritises investment in financial services, manufacturing, micro, small and medium-sized enterprises (MSMEs), digital infrastructure and renewable energy, while seeking to attract greater volumes of private capital into high-growth sectors.

The move comes as Bangladesh seeks to diversify its economy, strengthen industrial competitiveness and attract foreign investment amid global economic uncertainty and mounting climate challenges.

“Bangladesh has made remarkable economic progress over recent decades, underpinned by a dynamic private sector and entrepreneurial talent,” said Srini Nagarajan, managing director and head of Asia at BII.

“Through our new strategy, BII is reaffirming its strong commitment to Bangladesh’s long-term development and will build on more than 40 years of partnership in the country by backing businesses that expand opportunity, strengthen resilience and support the green transition.

“Our ambition is not only to invest, but to help mobilise greater pools of private capital into the sectors that will shape Bangladesh’s future growth.”

The institution said its future investments would place greater emphasis on job creation, gender inclusion and environmentally sustainable business practices.

Among its previous investments, BII highlighted its financing for Jinnat Textile Mills, which helped create more than 900 direct jobs, with women accounting for more than 44% of new recruits while also improving workplace standards and promoting more sustainable manufacturing.

It also pointed to its lending partnership with BRAC Bank, which has supported approximately 3,500 entrepreneurs, particularly MSMEs and women-owned businesses that often face difficulties accessing formal finance.

The strategy also aligns with BII’s broader commitment to frontier markets. The institution said at least 25% of the value of its new investments globally during the strategy period would be directed towards countries classified by the United Nations as Least Developed Countries, including Bangladesh.

British High Commissioner to Bangladesh Sarah Cooke said the initiative reflected the UK’s confidence in Bangladesh’s long-term economic prospects.

“The United Kingdom believes in Bangladesh’s economic future,” she said. “British International Investment’s new strategy will help create jobs, crowd-in private sector investment and support economic transformation.

“As a reliable, long-term economic partner, it demonstrates our commitment to a modern UK-Bangladesh partnership built on trade, investment, knowledge partnerships and shared prosperity.”

The announcement underscores Britain’s continuing effort to position itself as a long-term development and investment partner for Bangladesh, with a growing focus on mobilising private capital alongside public investment to support the country’s next phase of economic transformation.

Provisioning against negative equity surged by 36 per cent over the past 18 months to Tk 36.68 billion as of May 30, up from Tk 27.0 billion in October 2024, as brokerage houses and merchant banks are complying with regulatory directives to build stronger financial buffers against potential losses.

Market insiders point out that this reflects a gradual improvement in the financial health of brokerage firms, as many institutions have strengthened their balance sheets through higher provisioning and tighter risk management practices following regulatory directives.

The Bangladesh Securities and Exchange Commission (BSEC) last year granted market intermediaries additional time to complete provisioning for unrealised losses and adjust negative equity.

Depending on board-approved roadmaps, most institutions received one- to two-year extensions, while a few were granted deadlines stretching to 2030 or even 2032.

The regulator also instructed all institutions enjoying extended deadlines to submit quarterly progress reports until full compliance is achieved.Economics

The scale of the exposure

The latest progress report, prepared by the securities regulator as of May 30 this year, showed that 146 brokerage houses and merchant banks, operating under the Dhaka Stock Exchange (DSE) and the Chittagong Stock Exchange (CSE), collectively extended Tk 160.41 billion in margin loans.

Of that amount, the industry's outstanding principal stood at Tk 78.20 billion, while accrued interest reached Tk 27.27 billion, taking the total outstanding exposure linked to negative equity to Tk 109.78 billion.

The report also showed that unrealised losses remained high at Tk 40.43 billion, reflecting the prolonged weakness of the stock market and the large number of defaulted margin accounts.

Despite the sharp rise in provisioning, outstanding negative equity has increased slightly from Tk 105.2 billion reported in October 2024. At that time, outstanding principal amounted to Tk 78.6 billion and accumulated interest stood at Tk 26.6 billion.

According to the latest data, the capital market had 1.41 million active beneficiary owner (BO) accounts, including 131,524 margin accounts. Among them, 36,610 accounts remained under negative equity, meaning the market value of pledged shares was lower than the outstanding margin loan balance.

Emergence of negative equityMaps

Before the 2010-11 stock market crash, lenders disbursed margin loans aggressively, boosting liquidity in the market. Some lenders exceeded regulatory limits and provided margin loans to artificially push certain stocks.

Stockbrokers and merchant banks provided margin loans using funds received from parent companies, most of which are banks.

The market surged in 2010 driven largely by margin loans and then crashed, causing massive erosion of asset values.

The problem, persisting since the 2010 debacle, has intensified over the past 16 years, becoming a heavy burden on the equity market and restricting its growth.

Over time, negative equity ballooned as lenders refrained from selling securities in margin accounts to make adjustments, hoping for a market rebound that never came.

Market operators said margin loans deepened financial distress and weakened intermediaries and banks, ultimately straining the entire capital market-even those who did not take margin loans.Exchanges

Previously, the securities regulator extended the deadline for negative equity adjustment at least six times, but most intermediaries failed to comply due to a prolonged bearish market.

As the market failed to recover as expected, unrecovered losses accumulated over the years, leaving brokers and merchant banks burdened with a large volume of negative equity.

Recognising the issue as one of the capital market's most persistent structural weaknesses, the BSEC in 2024 sought the intervention of the Financial Institutions Division under the Ministry of Finance to explore a permanent solution.

Nevertheless, the latest data indicate that market intermediaries have made substantial progress in strengthening their balance sheets through increased provisioning.

An analyst said the higher level of provisions would improve the industry's capacity to absorb potential credit losses and enhance the financial resilience of brokerage houses and merchant banks.

They, however, cautioned that the continued increase in outstanding negative equity underscores the need for sustained provisioning, recovery of long-overdue margin loans, prudent risk management and supportive policy measures to finally eliminate one of the country's longest-running capital market vulnerabilities.Economics